Marketplace plans: Healthy, or on a death spiral?

Wednesday, June 18, 2014 11:19 AM

The Affordable Care Act is fulfilling its promise of making health insurance affordable and accessible for more Americans, according to a new report released by the U.S. Department of Health and Human Services. However, a conservative group says the report provides additional evidence that enrollment in Obamacare by people with above-average health costs will make the subsidized health plans unsustainable.

A majority of people who enrolled in health plans through 36 states (including Iowa) using a federally facilitated marketplace chose plans that offer advance premium tax credits to lower their monthly premium, according to the Premium Affordability, Competition and Choice in the Health Insurance Marketplace 2014 report.

Nationwide, nearly seven out of every 10 individuals who selected a plan with tax credits through the federal Marketplace secured coverage that costs $100 or less per month after tax credits. In Iowa, 57 percent of those who chose plans with tax credits are paying $100 or less per month.

The average premium after tax credits for Marketplace plans in Iowa is $108 per month, a 69 percent reduction from what they would have paid without tax credits.

On average, the Marketplaces are offering a choice of five issuers and 47 Marketplace plans from which to choose, the report found. Each additional issuer participating in the Marketplace is associated with a 4 percent decline in the silver plan premium, which is the middle label for the three tiers of plans.

An analysis of the report by the National Center for Public Policy Research suggests that people who will make a lot of medical claims have signed up through the Marketplace. Individuals with lower incomes have chosen silver plans - which are higher cost but provide greater benefits - at a higher rate than any other plan, wrote Dr. David Hogberg, an analyst for the center.

"We've seen anecdotal evidence elsewhere that exchange enrollees are less healthy than average," Hogberg said. "Today's report only provides further proof of that."